At a press conference April 14, Gov. Haley Barbour spoke again about state energy projects and touted the proposed Kemper County clean coal project that will be approved or disapproved by the state Public Service Commission this week.

Barbour has said repeatedly that as long as he is governor, his energy policy is “more energy.”

Barbour hailed Kemper as a “home run for Mississippi” in his January State of the State address.

Kemper would not only use a Mississippi fuel source, lignite coal, but it would capture carbon dioxide emissions, which could then be sold for use in enhance oil recovery. Barbour has also praised the plant’s ability to put Mississippi on the map, since it would be the first U.S. commercial-scale power plant to capture carbon.

Kemper is the largest proposed addition to a public utility in Mississippi state history. Mississippi Power Company, a subsidiary of Southern Company, is the parent of the project, which will cost at least $2.4 billion. As with any public utility improvement, MPC’s ratepayers will bear the cost over time, as the company receives a return on its risk in investing. The company proposed a price cap of $3.2 billion in a March Commission filing. MPC serves nearly 190,000 rate payers in 23 southeastern Mississippi counties.

The decisions of three people – state public service commissioners Leonard Bentz, Lynn Posey and Brandon Presley – will affect the residents and economic development climate of southeastern Mississippi for the lifespan of the proposed plant, which is 40 years.

The Commission agreed with MPC in Nov. 2009 that the company’s service area would need between 400 megawatts and 1,300 megawatts of new, baseload generation by 2014. Regulated public utilities have a responsibility to meet the energy needs of customers.

Kemper has also been a priority of the Mississippi Energy Policy Institute (MEPI), a public-private partnership which Barbour founded to develop state policies that foster energy industry development. MEPI board members include: an MPC vice president and its CEO Anthony Topazi; Denbury Resources, which specializes in Enhanced Oil Recovery; and, North American Coal, the company set to mine Kemper’s lignite.

The Kemper County Integrated Gasification Combined Cycle (IGCC) facility will produce more than 582 megawatts of new generation for customer consumption, while capturing 65 percent of its carbon emissions, making it as clean as a natural gas-fired generating facility.

The plant and its new Transport Reactor Integrated Gasification (TRIG) technology have been a long time in the making. Southern Company developed TRIG at the Power Systems Development Facility (PSDF) in Wilsonville, Ala. along with its partner, KBR, and the U.S. Department of Energy (DOE). The DOE endorses the Kemper project, which is a scale-up of a plant already in operation at the PSDF.

Kemper was awarded $270 million in DOE funds, which were left over from Southern Company’s proposed Orlando Gasification Project that was cancelled after Florida decided the state was not interested in more coal plants. The funds were transferred from Florida to Mississippi in Dec. 2008, after help from BGR Group, the Washington, D.C., lobbying firm founded by Barbour.

BGR prominently features the DOE funds award as a client success story on its website, saying the firm, “Negotiated successfully with the U.S. Department of Energy to approve the transfer of a clean coal power plant to a new location and approval to transfer the funds that had been appropriated for the project.”

Southern Company has been a BGR client since 1999, having spent a total of $2.6 million with the firm, according to federal lobbying disclosure documents. Southern is one of the largest U.S. electricity producers, serving 4.4 million customers in four states. Barbour lobbied for Southern Company until running for the governor’s office in 2003.

When asked about BGR’s role in securing DOE funds for Kemper, Topazi said, “I’m not aware of Gov. Barbour’s previous firm being involved in getting us the money. We applied for the CCPI-2 (Clean Coal Power Initiative) grant money. That was out there and available to all utilities.”

In a subsequent Mississippi Business Journal interview, Topazi said, “I met with DOE early in 2008 and received approval in May 2008 to transfer the remaining funds, $270 million, to our Kemper County project. BGR did not assist me in this matter and were not present in my meetings with DOE.”

Topazi did not directly address Southern Company’s relationship with BGR.

Barbour’s ties to his former lobbying firm were questioned in 2007 when Bloomberg News and The New Republic were leaked a copy of his blind trust, which stated he owned 48,321 shares of Interpublic Group of Companies Inc., the company that then owned BGR, originally named Barbour, Griffith & Rogers Inc.

An amended blind trust submitted to the Mississippi State Ethics Commission in 2009, states that the governor’s shares represent less than 1 percent of Interpublic Group. The trust also states that Barbour has a “profit sharing plan” with Barbour, Griffith & Rogers. In typical profit-sharing plans, an employee receives a percentage of profits based on a company’s earnings.

At the time of Barbour’s inauguration, Mississippi had no state law specifically relating to blind trusts. A law was, however, created in 2008.

Blind trusts are usually used at the national level to insulate public officials from conflicts of interest. Assets are placed into a trust at the time of inauguration and kept by a trustee away from the official’s eye.

Barbour, a former Republic National Committee chairman, co-hosted a party along with Southern Company at the Republican National Convention in Aug. 2008.

In an April 6 Commission filing, two independent power producers (IPPs), Entegra Power Group, LLC, and Calpine Corporation, said that at a rate of 8.7 percent return on equity, MPC’s shareholders will make $62 million to $82 million annually from the Kemper project “at the expense of ratepayers even if Kemper merely meets the lowest performance standard.”

Plant opponents have taken issue with a portion of the state’s Baseload Act, which states that the Commission can allow a utility to include in rate base all prudently incurred expenditures related to a generation facility “whether or not the construction of any generating facility is ever commenced or completed, or the generating facility is placed into commercial operation.”

In a response to the IPP filing, MPC noted that its proposal filed with the Commission states that “if the project is cancelled for any reason other than a force majeure or change in law event, the Commission will have the right to review the prudence of all the costs of the Project, even those costs previously found to be prudent through the quarterly prudence review process.”

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